Audi rules out U.S. production for now, needs more local sales

Audi rules out U.S. production for now, needs more local sales

Alex Kaufmann
April 22, 2009
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Audi currently has no assembly or production facilities in North America but was reportedly considering starting a local operation to help avoid currency fluctuations from importing popular models from overseas. The company has announced today that it is postponing its decision on a North American plant for now, due mostly because of lack of volume in the market and a need to develop a suitable supplier network to source parts locally.

Audi's parent company, Volkswagen, is currently in the process of building a new plant in Chattanooga, Tennessee, and it’s possible, although unlikely for the near future, that Audi could use this plant for local production of its own models. Scheduled to open in 2011, the new plant makes sense for Volkswagen's "economies of scale" but does not oblige Audi to use its facilities in anyway, according to the current president of Audi of America, Johan de Nysschen, who spoke recently with Automotive News.

Furthermore, the VW plant will be mounting engines transversely for the VW platforms it will be working with, while Audi's engines must be mounted longitudinally - thus diminishing the efficiency of the plant overall and making the case for not producing Audi vehicles locally until more sales have been notched up.

Nysschen also stated that it’s possible the carmaker could purchase an already existing production facility, but before any steps are taken in this direction the volume of sales for Audi has to be increased. Last year Audi sold nearly 90,000 vehicles in the U.S., but the German carmaker is aiming to more than double this figure to 200,000 within the next 9 years. Should this goal be achieved then we might see Audi talking more seriously about production in North America.